Some literature organisations may "find their days numbered" following major changes to Arts Council England's funding system, according to some industry insiders.

ACE announced this morning it was to scrap the regularly funded organisation (RFO) status that had previously given long-term support to 850 arts bodies. Instead organisations will have to apply for funds on a fixed-term basis.

Meanwhile, over 100 organisations will lose their funding altogether in the next four years as ACE looks to slim down its portfolio after a 29% budget cut announced in the comprehensive spending review. Fifty-eight literature organisations will be affected by the changes, including publishers such as Carcanet, Bloodaxe and Flambard Press, campaign bodies including English PEN and Index on Censorship, and events such as the Ledbury poetry festival, the Manchester literature festival and Lancaster's Litfest.

At Northumberland-based poetry publisher Bloodaxe Books, chairman Simon Thirsk said that while his company was "in a very good position because sales are holding up and the popularity of poetry is growing", other organisations "may well find their days are numbered". He added: "I do worry about people who have given the whole of their working lives to poetry and the arts and who may lose funding."

Gary Pulsifer, publisher at small London company Arcadia, said he now faced a period of uncertainty. "We had our annual review meeting with a literature officer [from ACE] last week, and he did say, 'Don't factor into your accounting funding after next year from the Arts Council England,'" Pulsifer said. "Of course that has to affect how you plan your future – whether it's the possibility of raising money from other sources or cutting back on translations, in our case."

Cathy Bolton, director of the Manchester literature festival, said it was a time of "stress" for organisations losing their RFO standing, though she added that she thought ACE was taking "a very responsible approach" to dealing with the funding cuts passed down by central government. "Until we know where we fit into the new funding system, it'll be hard to know the impact – but anything less than a confirmation of three years of funding does stop you planning for the future," she said.

Jonathan Heawood, director of English PEN, said the new approach ACE announced this morning might suit his organisation. "We're quite positive," he said. "Of course the fact that some organisations will lose funding altogether is worrying. But in the past the way funding was monitored was on the basis of bums on seats and legs through doors, which meant an organisation like PEN – which tries to help people have the freedom to write and read – was a round peg in a square hole. The new approach is a bit more strategic and interested in organisations supporting arts in a more general way, which might suit us."